New vehicle sales in Thailand declined 5% to 64,440 units in June 2023 from 67,952 a year earlier, according to wholesale data from the Federation of Thai Industries (FTI). The data excluded BMW and Mercedes-Benz.
After a slight increase in May, the market resumed its multi month decline as it continued to lose momentum following an initial rebound from the pandemic low last year.
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Economic growth in the second quarter was expected to come in strong, at 3.5% – 4% year on year after growing 2.7% in the first quarter, reflecting strong domestic consumption driven by a rebound in the country’s tourism sector and buoyant fixed investment.
While consumer confidence appeared to have improved in recent months, central bank interest rate hikes over the last year, from 0.5% to 2%, are holding back purchases of big ticket items. The FTI blamed tighter bank lending due to high household debt for this year’s market decline. Political uncertainty following last month’s inconclusive general election was also a negative factor.
Domestic vehicle sales in the first half of 2023 declined 5% to 406,130 units from 426,730 units a year earlier, driven lower mainly by weak demand for pickup trucks and other commercial vehicles. The association cut its full year domestic market forecast to 850,000 units, from 900,000 units previously, in view of the weak first half of the year.
Vehicle production rose 6% to 901,512 units in the first half, boosted by an 18% rise in production for export to 528,816 units as domestic vehicle manufacturers fulfilled the order backlog which followed last year’s supply chain shortages.
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